Episode 35: Behind the Scenes of Transportation Insurance with Chad Eichelberger of Reliance Partners

Intro – 00:00:01:

Welcome to Freight Nation, a trucking podcast where we explore the fascinating world of trucking and freight management. We dive deep into the freight industry and uncover why the trucking industry is more crucial to our country now than ever before. Stay tuned to uncover the driving forces behind successful trucking businesses and hear from the hardworking truckers and leaders who keep the world moving. Let’s hit the road.

Brent – 00:00:27:

Well, hi. Well, welcome back, Freight Nation. It’s good to see everyone today. I appreciate you giving us your time, your effort, and your energy. You’ve got a lot of places you can put your time in this world, and we just appreciate you listening to Freight Nation, a podcast by Truckstop. Today is going to be a lot of fun because there’s that big word. Everyone talks about the F word. There’s lots of things in the market, but there’s also the I word in this marketplace, insurance. Today, we’re going to talk to the president of Reliance, Mr. Chad Eichelberger, and we’re going to talk all about his pathway in this industry, which is always the most fun. The story is the most fun. That’s why we want you to tune in to Freight Nation is to hear the story on how someone developed their career inside of the freight transportation marketplace. But we’re going to talk a lot about insurance because, boy, is it a big part of transportation today. It kind of always has been since it’s federally mandated. But, man, managing that’s a big deal. But we brought an expert on today, Mr. Chad Eichelberger, the president of Reliance. Chad, man, thank you so much for joining us on Freight Nation today.

Chad – 00:01:21:

Hey, Brent, thanks for having me. Always enjoy our conversations. Look forward to talking today.

Brent – 00:01:26:

Well, Reliance has become a major player in the marketplace, a provider in the marketplace for insurance services to not just transportation companies or trucking companies, but also the freight providers in the marketplace. And I’m sure you guys have lots of plans to go to places. But before we start into like what’s going on with Reliance, I want to talk a little bit about Chad’s journey. And by the way, it’s Eichelberger. And if you can spell that easily, good luck. But it’s Chad Eichelberger. All right. So everybody’s got that down? All right, Freight Nation. We always like to make sure I get names right. I got Kathy’s name wrong on one of the previous podcasts. And boy, I don’t want to do that again. But Chad, you had a really cool pathway into this marketplace, which is kind of unique. So when you were a young guy and you were growing up, boy, I’m sure you just wanted to get right into freight transportation. What was that dream when you were a young man of what you wanted to be?

Chad – 00:02:13:

You know, all the way up until the end of high school, I was like, I’m going to be a professional baseball player, you know.

Brent – 00:02:17:

What position did you play?

Chad – 00:02:19:

I was second base. I still believe that. Everybody was like, what are you thinking here? And, you know, that didn’t work out all the way. Just a very short duration of time at a small junior college. And after that, I figured out I wanted to be at University of Tennessee. And so beyond that, you know, probably haven’t picked up a baseball outside of throwing with my son since then. But I found my pathway into logistics from there.

Brent – 00:02:41:

Right. Fantastic. So when I was a kid, I thought I wanted to be Spider-Man. So I kind of still think I want to be Spider-Man. But then I wanted to be an athlete. I’m the son of a professional athlete. My dad played football for the Redskins. And so I thought for sure. And then after one year of Division II football, I went, I am not going to be a professional wide receiver in the NFL. I got to move on. I went to Auburn. You went to Tennessee, another one of my favorite schools. And what year was it when you moved into transportation? Because you’ve worked for a couple of the biggest players in the marketplace. You’ve worked for Coyote and for Access. Talk a little bit. Did you start with Coyote? Did you start somewhere else and then you moved into Coyote?

Chad – 00:03:15:

Yes. So, you know, right out of school, I took a job down in Atlanta for a little while. Basically, to really dumb it down, I kept gas stations for money out of gas. And believe it or not, that was more challenging than you would think because a lot of these were high volume. You know, we’re constantly trying to juggle, you know, the same things that dispatchers do today for motor carriers. And so I was involved in that side of it, learned a lot, really enjoyed my time there. But at the time, you know, I had a logistics degree from Tennessee.

Brent – 00:03:43:

Oh, you did. You have a logistics degree from Tennessee.

Chad – 00:03:46:

Yes, sir.

Brent – 00:03:47:

I know they’ve got a great supply chain program there. Mary Long, my friend, runs it there now. So that’s fantastic. Now, wait, I’m a backup step. Oh, that’s interesting. This was, and by the way, I got it backwards. You were at Access, then Coyote, right? So I got that backwards. Sorry about that. But so this is unique for Freight Nations because the supply chain study is something that’s not new to our world, but it’s kind of new in the collegiate, from the collegiate standpoint. So tell me a little bit about why you chose logistics.

Chad – 00:04:13:

Well, I didn’t do very well in accounting. So, you know, that was still in the school of business and it made sense to do it, you know, why everybody does it.

Brent – 00:04:21:


Chad – 00:04:21:

So no, I did that, really enjoyed that pathway around the space, talked to a lot of people, and I didn’t really know what part of it if I wanted to be more on the supply chain side, you know, and work for a manufacturer or shipper. But the more I got familiar with the freight brokerage model, I really liked that. I liked the ability to be able to go and work hard and get back what I bought. And so I did that. And so I did that. And so I did that. And so I did that. And so I ended up getting on with this small startup in Chattanooga, Tennessee called Access America.

Brent – 00:04:50:

Yeah. All right. So when you walked in the door the first time, like, what was it like? And first off, what was your first position there? And then what was it like just kind of getting into it as far as like, what was the learning curve for you?

Chad – 00:05:01:

Well, I came in at a market kind of high up cycle. And so immediately, like everybody needed help. And I was like, oh my gosh, I look at this. I can go get new customers. I can do this. I can move this. You know, they had to throw me out of the building a lot. The neighborhood we were in was probably a little untraditional at the time for 3PL. We weren’t in downtown. It was very kind of humble beginnings. And, you know, sometimes they would say, hey, we’re shutting the gate at six o’clock. You got to leave. So I really poured myself into it. I loved it. I was like, gosh, this is great. I can’t believe I’m getting paid to do this. And look at what I can do. So it was like immediately felt like, wow, this is something that I’m going to really enjoy. And I did. And, and so I don’t know what my title was, I guess something in sales, but just hustled my way there.

Brent – 00:05:44:

Were you on the buy side from the shipper and the sell side to the carrier? Which side were you, or have you worked on both sides?

Chad – 00:05:49:

We were cradle to grave at that point in time at Access America. And that was until the company exited to Coyote. And so I did both. And I had the opportunity pretty quickly to start adding people on a team. And so I started getting people on a team and handing stuff off and then building it back again and repeating that process over and over. I was real fortunate that they recognized the work and the effort and energy I was putting in. And so I was promoted a few times at Access. I think in 08, I became president at Access. And it was just a fun ride.

Brent – 00:06:19:

08, so how old were you in 08?

Chad – 00:06:20:

I think I was 28 or 29.

Brent – 00:06:22:

Wow, that’s young. That’s a young man to be the president of a company.

Chad – 00:06:26:

Well, I’m not young anymore.

Brent – 00:06:28:

None of us are. So what was it like? Okay, so you finished at Tennessee, you got out of the fuel business, you got into the logistics business. You really found you had a passion for that. You had a desire to kind of continue to achieve. You obviously achieved at Access, getting all the way up to president. So for Freight Nation, everybody dreams to advance their career, right? I mean, you either want to own a business or you want to progress up in a business where you’re in management and then you’re in leadership and then you’re in chief level leadership or president. It’s kind of like the chief of the company. So how was your day different when you became president than when you were just sort of in the mid-level part of the organization? How was it different?

Chad – 00:07:04:

You know, we were still, I mean, Access America was very bootstrapped, very entrepreneurial. I was really fortunate to have some great guys and mentors around me. I think it just kind of happened organically. I was doing a lot of those functions. I was helping support other people. I was helping grow the team. And, you know, they continued to allow me to advance in the company. And so one day they let me know they wanted me to be president of the business. And I don’t really think much changed that much over time. I mean, you have certain decisions you have to make where you’re looking at stuff from, you know, a higher perspective. And you have some of those are difficult decisions. But I don’t think my day-to-day changed dramatically. I still, up until the point we exited that, I still sold every day. Every single day. Yeah. I mean, yeah, it felt like, you know, I needed to do that. I would go on sales calls with people. I’ve got some pretty wild stories on walking into back doors at places with different sales reps. And we had extra time on a call like, hey, let’s cram this in. So I don’t really think anything changed. I think I’ve always had the desire, like, sales is the lifeblood of any business. And you have to lead by example.

Brent – 00:08:06:

Well, the market was hot and has been. When I say the market, I say the logistics, the brokerage marketplace has grown. And so Freight Nation, if you don’t know this, truck stops started in 1995. Since 1995, the logistics marketplace has grown by 10% year over year. And by the way, if you can grow something by 10%, it’s wild growth. And we’re not talking about a small industry. We’re talking. We’re talking about, well, just to say this spot market, you know, anywhere from $100 billion to $200 billion of freight moves today through just that part of the market. So back in 2008, boy, that was, it was a booming marketplace to be in. Except, Chad, it was 2008. Now, something big happened in 2008 called the Great Recession. So how did you manage through that? So this is another sort of advice on managing through challenges.

Chad – 00:08:49:

Well, I think the way we looked at it was, A, you always plan and prepare if things don’t go as… So obviously, we had contingency plans in place. And probably like everybody at that time, you had a choice. You want to kind of buckle down and weather the storm. You want to be aggressive and leverage a marketplace that is challenging and outwork everybody and increase your market share. So when we exited that business, we were about $675 million run rate revenue and acquired by Coyote. But I can remember going 08, 09, we grew 42 to 56 million in revenue during the period of that one year. And so that wasn’t the growth we were accustomed to in a favorable market, but it was still growth nonetheless. And so we were very aggressive during that time. And we didn’t have our head in the sand on what was going on in the marketplace. We understood it was a challenging market, but we got indoors with a lot of people then that became large shippers and large customers. And built good relationships with the motor carriers that we worked with. And when they knew they could depend on us, I think they would come back time and time again. We had no qualms about losing money on shipments and we didn’t give loads back. So I think all of it was just, we hustled through that time. It was a tough market, but it ended up working out to our benefit.

Brent – 00:10:03:

Well, that’s a pro tip for a nation right there to Chad’s point. Number one, grit has a lot to do with your success, no matter what you do. Remember, he said something interesting on this, just for a nation. He said, we didn’t give loads back. In other words, they did what they said they were going to do. And on top of that, for a nation, another pro tip in this is Chad said they always had contingency plans. And that’s super important. It doesn’t matter whether you’re running a one truck business, a one, or you’re an agent for a larger entity, or you’re running your own business. Contingency plans on the what ifs are super important. I know this is our chief economist, Noah Perry is always talking about this. No matter the market you’re in, it’s either going to go up or it’s going to go down because they never sit still. All right. So super cool. So you move fast forward all the way through Access America, you end up with a very large runway. I think you said 675 million, you were acquired by a big company. So tell me about what was that process when you guys got acquired?

Chad – 00:10:57:

You know, it was really good. I think overall, kind of walking back and thinking back through that Coyote, obviously it was a larger business than we were at the time. Not, you know, they were larger in revenue, but significantly larger in employee headcount. They had developed their own technology. They had a lot of the things, bells and whistles with, with their tech that we’re missing out on. We couldn’t go and, you know, do an outsource deal with a large shipper. We did a few of them, but the tech wasn’t to the level we could do that. We didn’t have a carrier sales team. And as we kind of looked at the business overall, we said, Hey, this is kind of a, this is cliche, but a one plus one equals three scenario. Like we can leverage what Coyote has been able to build and what they’ve done. We can leverage our sales acumen. And together, we really felt like this is a really good value proposition for our customers at Access America. We also had a lot of flatbed volume as well, which was something at the time Coyote didn’t do a lot of. So I think we were attractive in that we both had grown very quickly. The companies culturally looked very similar, obviously different service model, different technology, but it just made a lot of sense. And we got to know, I got to know Jeff and Marianne and Jonathan over there very well and have since built just, you know, hundreds of relationships from the time at Coyote. And so it really made a lot of sense. Now I traveled everywhere. I won’t say that it was all easy working through the integration, putting two companies that had been two of the largest, three largest privately held brokerages in the country together. But I think we did it pretty well. And I think when I look back at that time, I learned a ton personally. I know a lot of the people around me did. And a lot of the folks that were part of that deal are still working at Coyote today. Some of them have moved on and they’re in other businesses in the space, but it’s kind of like a reunion when we go to a conference. Wow. There’s so many former Coyotes and current Coyotes here. It’s wild.

Brent – 00:12:46:

Yeah. Well, Jeff’s a good guy, a real pioneer in what’s going on. And so you’re ending up selling to them, and I’m sure it would end up being a great benefit for you. And then you actually progressed into Coyote. You moved up in Coyote as well. What was your position at Coyote?

Chad – 00:12:59:

So I was president of brokerage at Coyote. And so that really entailed a lot of what I was doing prior to that. I would still get out customer-facing. I would visit our offices, work with the different managers, because suddenly when we had an expanded team, we had double the offices and so I worked closely with the leadership team, with the sales management team. I would get out to the offices. I was gone a lot, a whole lot.

Brent – 00:13:21:

Did you stay in Chattanooga, or did you have to move to Chicago?

Chad – 00:13:25:

No, I stayed in Chattanooga, but I would say I was in Chicago fairly weekly. I mean, I think there was a point in time that I knew the shuttle schedule between O’Hare and LaGuardia on Delta. And so I did a lot of that, a lot of travel, but worked with some really great people on both ends. And I mean, it was exciting, and I learned a lot through the process.

Brent – 00:13:44:

Yeah. So you were there in 2014, 2015. Obviously, you would think with all the success that you’ve had through Access and then Coyote. I mean, you had leadership positions, the ultimate leadership, the president of both those companies. So you would think that you would be satisfied kind of with where you were going. I’m going to guess there was an idea somewhere in the back of Chad’s head going, there’s something else I think I can accomplish out there. And so talk to the Freight Nation watchers and listeners a little bit about that day, because I love to talk about the day when people, that switch just flips and you go, I’m going to do it. I’m going to, I’m just going to do it. But so tell the watchers and listeners of Freight Nation a little bit about what brought you to that day of making the decision to go out and start Reliance Partners.

Chad – 00:14:29:

Naturally, as I kind of looked at it all, I was traveling a lot. I had a young child at home at that point in time. He had some health challenges at the time that ended up working out incredibly well, but I wanted to be around him more. So I wanted more time at home. I think that was probably the number one thing that I thought about too. Reliance was actually founded by Andrew Latabashe back in late 08, early 09. And so Andrew had been our agent at Access America, we had built a really close relationship. I wanted to stay connected to the space, but I think it was ready to try something different than freight brokerage. And I looked at insurance as this kind of stale and archaic. And, you know, I made some calls and talked to people in the space and kind of understood the competitive landscape and felt like there was an opportunity for us to build something really special, a specialist in that vertical that only does trucking and logistics. And at the time we did some other things. And over the course of probably the next two or three years, you know, a lot of that business, we kind of jettisoned off and we want to focus what we were doing on and do it well. And I think I thought there was an opportunity. And some of the takeaways I saw from Coyote, the investments they had made in technology had really paid off for the business. And so we were quickly able at Reliance Partners to start building tech, specifically oriented to trucking and logistics insurance. Whereas, you know, our competitors, they may have an off the shelf CRM or even one they built, but it’s certainly not going to be, just nuanced to trucking and logistics. It’s going to be all encompassing. And so we felt like we could incorporate a lot of tools and a lot of things that other people hadn’t. We also felt like we were really good at teaching people the business quickly, getting it up to speed and then doing it again. It was all about how quick can a person pay for themselves, much like in brokerage before you can reinvest again. And all of maybe the way the notions that people have thought about that in the past, about how long it takes an insurance rep to pay for themselves. You know, we challenged all of that and we pushed the limit on all that. And so it was a blast. I mean, it continues to be a blast, but in those early years, being able to do that and bring people in, we also understood the demographics in our space that trucking gone are the days of kind of the wild west trucker, you know, truckers in this country from all walks of life. And as an agency, we wanted to be able to support that. So we started recruiting for bilingual talent. We started going out and doing things like that to market specifically around it. We have today, I want to say 26 spoken languages and 30 nationalities at Reliance where over a third of our employees identify as minority over half are female. And so we wanted to build something that was different than what if you look at the space and the competitors that were out there, nobody had embraced the diversity side. And we look at that as a competitive advantage today.

Brent – 00:17:11:

Yeah, well, I’d seen that over and over in the insurance space. It was the trucker or the broker just calls their local insurance provider and that person know a tremendous amount about the marketplace or their needs. They just write a covering policy around it. But let me ask you this question. This is an observation. You left a brokerage company, Coyote, that required access. Was your experience in watching what technology did to move that business forward? Was that part of the genesis of you calling Andrew and saying, Andrew, I think I have an idea to help you grow your business, help you grow your platform. Does that kind of what got you going on that?

Chad – 00:17:45:

Yeah, I think so. And Andrew and I had always thought about, hey, we could do this together. We’re a lot alike. We’re very complimentary to one another. We become very close friends going out on weekends, going to dinners and everything, their families. And he was just a very close friend. And the thought of, hey, we could build something that’s different from everybody else. And in freight brokerage, you know, obviously there are other people with technology. There are great TMS platforms that are out there available that are off the shelf. A lot of that stuff had been done or was continuing to be done. I looked at insurance. I was like, wow, this is very fragmented, huge market share. When you look at very little market share for any single competitor. And if we were to go and really invest in this and really be strategic, we could build something that nobody else has done. And so that’s really the Genesis. What we try to do, you know, over these last 10 years is do something that other people haven’t done. Go against the grain. You know, we want to have a great culture. So, you know, I think when Brent, you probably think about walking into an insurance agency office and mahogany walls and everything. If you walk into here, it feels like a freight brokerage. And that’s by design. It’s an open environment. Nobody has an office. It’s and it’s a fun environment. It’s collaborative.

Brent – 00:18:55:

Right? Yeah. So, so that’s unique. So I just, I kind of maybe caught a little glimpse of that of how you were looking to maybe revolutionize or just move forward in industry that is necessary, but had been antiquated and the efficiencies were not really being gained because it was still a manual process. Trucking is a sense has moved far forward with technology, but it’s still a long way to go to working out the efficiencies without removing the personal content. You and Andrew started growing this business. All right. So I’m sure everything was so easy in the beginning. It just don’t know. Well, whatever everything just went exactly as I like to say, like Barney was safe gumdrops and fairy tales and it was also easy. Right? But sorry. So that’s not the case. No businesses that way. I know when we were changing truck stop, same thing on our end. Always a challenge, but you got to be willing to stay at it. So talk a little bit about some of those challenges as you guys began to reinvent Reliance Partners.

Chad – 00:19:49:

Well, I think when I first came on board, one of the things was where we want to go and recruit for talent. We want to bring these people in. And the immediate thing is, oh, they’ve got to be licensed, number one. And so we have brought all these people in and they’re like studying for their tests. And I’m like, wow, this is pretty inefficient that they’re sitting in this room studying. We want them to come in licensed now. We want this to be something they come into this business licensed. And so immediately, like the regulatory hurdles that are present in insurance and aren’t present in freight brokerage, I can’t put somebody in a seat and let them just call. They’ve got to be licensed. They’ve got to be licensed in that state. And so I think just on that alone makes it a little more difficult or maybe different to grow that. But you’re also looking for somebody that was able to do that.

Brent – 00:20:35:

Well, there’s a little higher bar to growing. An insurance company because the licensure that has to go into it, because of the responsibility that you are imputing to your customers. I mean, you don’t have a choice. So as you guys began to grow this thing, what were some of the other two? Because I love for the Freight Nation watchers and listeners to hear, okay, when you’re growing a business, there’s some problems that are unique to the industry you’re in. There’s some that are just a problem in growing a business. All right. So what were some of the things like, how was cashflow with your business? How was you already talked about the hiring, needing to hire the qualified individual, all those sort of things. So talk a little bit about as you guys began to sort of scale the business, how was cashflow with your business? How was cashflow with your business? How was what were some of the challenges you guys ran into there?

Chad – 00:21:12:

Well, I think you always, you pay attention to cash. We had some angel investors and so they were very supportive of the business, you know, as a whole and us having the ability to go and make those strategic hiring decisions where we need to. You know, I would also toss in like early on, we got very fortunate to run across Lauren Howell, who’s now our COO. Ronald Ramsey joined us, who’s our CRO. We had a lot of good insurance talent. You know, the gentleman that runs marketing, the three guys that run sales. So we were able to go and get talent. And I think it appealed in a lot of ways because our culture, but at the same time, market appointments are everything in insurance. And so you’ve got to have good market access. So Andrew and I, we would go and profile any competitor that came into the market or any new insurance company. So we’re an agency, insurance companies are who we rely on to go and, you know, fulfill the needs for motor carriers and our freight brokers or forwarders. And so we started expanding geographically. And so we run across these states and you’ve got to build this competitive map of what it looks like, who are the players, who do we need to get in front of? And so it would drive us crazy to lose to a market we don’t know anything about. So we would immediately try to go, hey, let’s schedule time with them. Let’s do this. And then we started leveraging tech to help tell us who those markets were and how we do that. And so that’s always it, you know, and we see it today. There’ll be a new market that shows up next week that writes an account in, you know, Bellevue, Washington, and we’re going to say, okay, who is this? We got to figure it out. And so for us, we want to have those relationships. And then the other thing I saw too, and I think Andrew did, was the importance of building the relationships with the insurance markets. And so making sure that our hit ratios are good, making sure that our agency loss ratios are favorable. There’s a lot more to it than I probably initially thought, but learned through the course of us scaling the business.

Brent – 00:22:59:

Yeah. So Freight Nation, I hope that you were paying attention to what Chad was talking about there. You got a little inside peek into how an insurance agency operates and what they think about it. But it’s not uncommon from standard business because Chad, you brought up a couple things. I’d love for you to talk a little bit to the Freight Nation watchers, a little bit about the value of having great people, having great partners that work in your business. And what I mean by partners is the people that work with you. So talk a little bit about that. You know, some people call them, that’s a resource. It’s always about the people. The greatest asset walks out the door every day, right at five o’clock. So talk a little bit about how important that was to getting the business, because I would love for the Freight Nation watchers to hear your point of view on the importance of quality people to work with.

Chad – 00:23:43:

Yeah, I think we immediately realized, one, okay, just from our employee base, we want to have diversity. We want to have people from different backgrounds, different industries, and meld that together. We were able to go and recruit some folks that had been in insurance that were really, you know, that supplemented everything we were already doing. They gave us new ideas. I feel like you’ve got to surround yourself with people that are smarter than you, and so that’s what we try to do every day. Andrew and I definitely aren’t the smartest people at Reliance Partners, and that’s a really good thing for the rest of the company. So I think it’s surrounding yourself with that and building relationships, even as we’re talking about, and I don’t like the word vendor as a whole. So as we’re talking about our markets, because they’re not a vendor to us, we work for them, they work for us as a partnership. And so going and building those solid relationships where if we need a favor done or we need them to take a second look or we need them to work with us on price to get a deal done, they’ll do that. And at the same time, you know, we have to also understand what they want to see, and they don’t want to a thousand submissions from Reliance Partners, and they’re going to write five of them. They want to see a good mix where they have good hit ratios, and they want to see the business perform well. And so it was important for us not only to build solid relationships internally, but just externally as well with our markets and premium finance companies that can help you get things done and really focused on relationships, on people, on culture, and a lot of the other stuff took care of itself.

Brent – 00:25:10:

Right. It always does. And you’ve got people with good character. So freight nation, I love you to hear this. You got good people with good character. A lot of the problems either don’t manifest themselves. They don’t show up or you’re able to really handle them really well, especially in the insurance game where you are protecting somebody else’s longevity of their operation, which is their business.

Chad – 00:25:28:


Brent – 00:25:28:

Yeah, it’s necessary. Sorry. So for a nation, I want to swap gears just a little bit here. I want Chad to talk a little bit of some operational things that that can help you in your business. And so you guys, Chad, serve both carriers or trucking companies. You also serve freight brokers. All right. So, yes, there’s a commonality between that they move freight together, but they’re different operations, different ways in which they look at the business. So let’s talk a little bit first about the. Trucking part of your operation, of your insurance services. And I say this because I’m going to ask you about what are some of the common mistakes that people think about when they think about insurance? Let’s say it’s a small carrier, because I believe you guys are one of the largest, if not the largest insurer of owner operators in the industry. Am I correct in assuming that?

Chad – 00:26:12:

So in terms of just overall unique number of motor carriers, we insure more than anybody. Of that, it’s comprised of pretty a third, a third, a third, if you look at kind of enterprise, small, fleet, large, so all over the board.

Brent – 00:26:24:

Yes. Yeah, yeah. So you’re a major provider to the, and I say owner-operators because the average truck stop carrier is a one, two, three truck owner-operator. Insurance is very important to what they do, but it’s a cost, obviously, to their operation. So what’s the advice that you would give an owner-operator when they’re looking for insurance? And then what are some of the common mistakes that are either overlooked or that they assume that they need that they don’t need when you’re looking? I know every operation is different, and this is no, you know, we’re not endorsing or saying anything here. This is just advice when you’re looking at the insurance marketplace that can help them run their operations. So talk a little bit about carriers and then flip-flop that and say, well, how does that apply to brokers?

Chad – 00:27:01:

I think it’s really important before they jump into that. I mean, the biggest challenge we see is somebody jumps into this space with very little experience. They immediately, their first year in business, the eligible markets to write a new venture motor carrier, it’s a very small number of markets that can actually do that. Insurance companies, as you’ve been in business longer.

Brent – 00:27:22:

When you say markets, what do you mean by markets?

Chad – 00:27:24:

So insurance companies that are available. Brent, if you go tomorrow and you start a motor carrier, I don’t think you should do that. But if you were to do that, your options are incredibly limited.

Brent – 00:27:36:

Many providers that will ensure a one-track operation is what you’re saying.

Chad – 00:27:40:

A new venture, one truck operation, and sometimes that differs by where you’re at from a geographical standpoint as well. And so I think it’s important for motor carriers when they’re looking to go and start a new business to get experience as an owner operator, to understand what that looks like, to understand how they’re going to source their loads, to understand, you know, who they’re working with and from relationship side, how they’re going to access freight. Do they need factoring? I think the more experience you can get prior to that and kind of understanding the dynamics of the space, the more successful you’re going to be. And you’re also going to set yourself up better from telling that story to an insurance underwriter. And so they understand, hey, this is a really good operation. This is a good risk for us as a new venture.

Brent – 00:28:23:

All right. So you’re talking about do your homework first. Get some experience and do your homework first. And realize that as a one or two truck operation, if you’re brand new, it’s going to be a little bit more of a hill to climb in getting the type of insurance that maybe is the best cost for you. I’m not going to correct my benefit because that’s across the board depending on what their operation looks like. All right. So your advice there is do your homework. Make sure you get some experience on this. And then what would be the next step for a carrier as they look at the overall marketplace for insurance?

Chad – 00:28:52:

I think one of the things you have to do is you have to be comfortable with your agent. I will say this, Reliance, a lot of times, we oftentimes find ourselves, you know, we’re right, we’re going out and looking for new business. It’s a really fragmented space, but we see folks sometimes that are maybe not transportation specialists, may dabble in it. Their brother-in-law called them up to an insurance trucking company, and they don’t have a lot of market access. They don’t understand maybe all the nuanced things that happen in our space. And so I think it’s getting comfortable with an agent that you understand, that feels like they’ve asked you the right questions around your business, that they should be able to take a quick glance at, you know, and if you’re a new venture, it’s a little different because you’ve got to fill out, you’ve got to let them know. But we have a lot of tools available to us. We can go and analyze the risk, and we can generally have a pretty good idea of here are the possible markets. And then that’s augmented by technology as well to kind of help us make that a determination. But I feel like going out, getting experience, talking to your agent, getting comfortable with that is an incredibly overlooked thing that we see happen in the marketplace a lot. And you’ve got to also understand what you want to do when you fill out that application and you just put, you check every box for cargo, your cargo rates are going to be higher. So what are you going to be hauling?

Brent – 00:30:10:

Hey, that’s a little pro tip right there, Chad. All right. Be specific about what you’re going to haul. Ensuring everything can be costly. Is that a fair statement?

Chad – 00:30:20:

Well, and where you’re going to operate. Again, there are certain states where the operation expenses are just higher. That’s reflected in insurance. If they see a lot of mileage in particular states that are higher risk states, that’s going to be factored in when they look at pricing for insurance. So it’s just, it’s one of those things you have to contemplate.

Brent – 00:30:37:

Right. So freight nation and Chad, I’d love for you to, if you wouldn’t mind explaining this about when an insurance company looks at the probabilities. So what’s the probability of something happening? This is how a lot of times the insurance is, from my very surface level understanding, you insure the person and then you insure the probabilities of things happening within a certain environment that they’re in. Or you insure the entity and then the probability. And so if you don’t mind, talk a little bit about that to the truck driving audience. And then I want you to talk a little bit about when brokers look at insurance or a logistics company looks at insurance and what are some of the important things they should be looking at?

Chad – 00:31:09:

Kind of to address both, as you look at a motor carrier, you have certain states where if you drive around and see a truck accident billboard every two miles, that’s probably not a real favorable jurisdiction.

Brent – 00:31:22:

So you’re saying Alabama is maybe a little tough because of all the billboards that are constantly on 2059 between Tuscaloosa and Birmingham.

Chad – 00:31:30:

Oh, yeah, that’s one of those states, but it’s not the worst state like it’s still and you’ve seen tort reform happening and continuing to happen in a lot of these jurisdictions. But it does play a role. And as they look at the probability of a loss, you know, a fender bender in Lake Charles, Louisiana, I’m going to tell you is going to cost a whole lot more than a fender bender in Green Bay, Wisconsin. Those are two completely different markets where there might be third party injury. There’s a much greater probability that there’s going to be a larger associated loss in Lake Charles than there is in Green Bay. It’s just how it works.

Brent – 00:32:04:

Right. So that’s the important freight nation is you’re listening to what Chad says. The type of market that you’re going to haul in or the geographic area in which you’re going to haul in is one of the determinants on the cost for your insurance. And I say this because, as we all know, the insurance has gone up tremendously as the cost factor for running an operation. I believe it’s either number two or number three in their total cost of running their operation for the year fuel, of course, being the number one cost for the operation. All right. So the swap to freight brokers. And then I want to talk a little bit about regulations and then fraud in the marketplace. And then what’s next? What’s next for Reliance Partners? So let’s talk about insuring a freight brokerage. What are some of the do’s and don’ts or what are you looking for inside the brokers?

Chad – 00:32:45:

You know, I think for us and obviously we insure freight brokers of all sizes. I know, you know, we’ve got a lot of very large free pills that we work with, but we also work with new ventures and everybody in between. So, you know, it really is no rhyme or reason and who we’re going to pursue. But I think one of the things that’s important is to understand as a freight broker is talking to an insurance agency. What do you want out of this? OK, when we look at cargo limits, you know, what limits do you need for your shippers? And so there’s a lot of things you can do there. Maybe there’s a specified shipper coverage on a cargo form that’s half a million dollars and everything else is at 100. But let’s understand the scope of your operation, what you’re going to be doing, who you’re going to be working with, who you do work with today. What is your loss history, if that’s applicable? And kind of paints a good picture of who’s going to be the best fit. And we always try to work with our three PLs to understand, too, like what are your goals from a cargo perspective? Are you looking to take on some of that risk? Are you looking to buy a primary form and maybe shield yourself from some of the risk? But at the same time, there’s varying levels of deductibles that you can also we can give you a look at. And then just from the liabilities perspective, what is the structure of the organization is to say private equity backed three PL. Naturally, generally, there’s a little bit more propensity to go out and buy a lot of the other coverages earlier on than maybe what you would normally see in the life cycle of a typical three PL. Is there a high net worth individual behind the three PL? That’s another reason why, if you look at the free, broke, roto liability limits to, you know, contemplate purchasing a higher limit of coverage and maybe what you would otherwise.

Brent – 00:34:21:

Wow. So you just threw a curveball at me. I didn’t. I never thought about the insurance on depending on how a freight brokerage might be backed, whether it’s an angel investor, a high value investor, whether it’s a corporation or whether it’s an individual and how you would write insurance amount covering them from a sort of an umbrella policy standpoint, because you never know what’s going to happen. And as they say, when people get sued, they always go after where the money is. If you wonder why owner-operators don’t get sued much, it’s because there’s not much money there. And I’m just saying that from a generalized standpoint. So Freight Nation, that’s a really big piece of advice for you if you’re running a freight brokerage, depending on where and how it’s funded is how you’re going to need insurance coverage on that. Chad, that’s a unique thing. I’ve never heard an insurance person talk about that. That’s kind of unique.

Chad – 00:35:05:

Well, I think you’ve got to look at their whole operation and where are their potential liabilities? Where are they going to rise? What is their level of comfort for that? And one of the things we like to do when we, let’s say we’re working with a startup brokerage, okay? Hopefully we can talk about their experience to the other insurance markets. A startup brokerage where nobody has freight brokerage experience generally doesn’t go very well, or it’s not going to be a higher growth and maybe they’re going to overlook some things that are going to trip them up later. But what does the experience also look like? What’s the bio on the leadership team? And the owners and the investors and what are some goals they have as a business? Where do they want to be? And a lot of times we can say, okay, you’re a new venture. You may not qualify for primary cargo in year one, unless you’ve got really strong history on the leadership team and being in the space, you may not qualify. So here’s what we think. We think probably this limit of coverage, we’re going to give you options for other ones, but this limit of coverage, and if you’re saying you want a starter kind of package, we could do this with the goal of you looking at this and this in year two, based on growth of the brokerage. And so I think you walk along and you see where things are at during the course of time. And each year you got to reevaluate and other coverages come into play.

Brent – 00:36:16:

Right. Yeah, it’s interesting when you talk about re-evaluating every year. That’s something that, as an insurance, this is not an autopilot type of purchase. Whether you’re a trucking operation or a freight brokerage operation, you need to look at the unique changes and the unique needs every single year. And this is why, coming back to your point about having a good relationship with your provider, no matter who it is, whether it’s Reliance or someone else, have a good relationship with them and make sure that they understand your markets. So Freight Nation is super important on that. All right, Chad, let’s swap a little bit to regulations, because obviously regulations, when you’re looking at an operation and how well an operation follows those regulations, is really important to determine on the insurance. And so there’s a few regulations that are kind of hitting our market. Drug and alcohol is hitting our marketplace. That’s one of them. But there’s all kinds of other regulations from EPA. It kind of all goes back to the violations against those, not just what the regulations are. We could talk about those all day long because the FMCSA continues to try to monitor and increase safety but it’s really about how you as an insurance group look at the violations against those regulations. So tell the Freight Nation watchers a little bit about how important it is to make sure you are keeping up to date on how you’re running your operations against the regulations in the marketplace.

Chad – 00:37:30:

Well, we encourage everybody to, you know, obviously, you’ve got to monitor your information out there. And there’s what’s called a data queue. And we have experts that do that, too. And motor carriers have the ability to go and contest violations that show up on there. So you should always be understanding when you bring a new driver on the impact of any past driver violations that they’re going to bring over. That may affect your ability with your current insurance market. You may get surcharged for that. if you’ve got 15 drivers and there’s one that continually has more violations, more moving violations, and, you know, as you mentioned, drug and alcohol is obviously a huge one. But that may exclude you from having coverage through certain insurance marketplaces where they’re like, we’re not going to go and insure this risk because of this one particular driver. So I think it’s important for the drivers and the owners to continually monitor where you land on that. And also, as it relates to when there is like an at-fail, accident that occurs and a driver’s tied, that’s going to rest with your business for a while. And so what you’re trying to do there is paint a picture of the type of operation you run. And is this a high frequency loss type scenario? A lot of times there may be a dollar value loss, but if the frequency is very low, insurance markets understand that there are going to be losses. That’s why they, you know, they’re out in the marketplace. But if it’s a frequency and also expense side issue where the markets, you know, operating 300% on your company, you’re going to take a rate increase if you’ve got a frequency and you’ve been on profitable form. It’s just how it is. So understanding how you can make yourself attractive. And when you do have a loss, you know, is this part of a bigger issue that you have, or it’s just a one-time hiccup?

Brent – 00:39:12:

Yeah, I got you. So super important to pay attention to those freight nations. So all right, so I want to swap. We got a few minutes left here. I want to swap to what’s been one of the biggest challenges in the marketplace since October of 2022 is the rise of fraud in our marketplace and how you guys look at it and how that has an impact on insurance. So talk a little bit about what you guys have seen and then how it’s impacted the insurance cost. And then what are some suggestions on your end that you guys want to make sure that these entities are paying attention to?

Chad – 00:39:39:

Yeah, I think specifically, I think there’s really two ways to address that too. One, starting with the motor carriers. Please do not sell your authority to somebody who’s going to pay you with Venmo. That’s not going to end well. They’re going to use it to commit fraud. If you’re going to cease operations, you don’t want to turn around and do that because it may be you that somebody turns around and tries to come after for that loss. And we’ve seen things like motor carriers, cell phone, and email. And all of that is so long with their logins to road boards and along with their logins to freight brokers. And suddenly that opens them up. So that’s one thing I would really ask motor carriers to think through that before you do that, because you may find yourself with a whole lot more headaches later than you ever imagined. And I think from the freight broker side, as we kind of look at where the market is today and how these losses continually are happening right now, working with, and there are several of these out there, a good third-party motor vetting software tool that’s going to help detect some of these, help you and help your team, your compliance team go out and mitigate these things before they happen. But specifically, certainly the selling of authorities is problematic. I think we also see some of these motor carriers that are entering the market with several different MCs attached to their name. Maybe some of them are attached to family members’ names. They’re operating in good standing. They’re working with 3PLs. They’re doing everything right with an idea that they’re going to do that right for about six to nine months, and they’re going to take a subset of them, and then they’re going to go rogue, and they’re going to take shipments. Sometimes they’re even going to go rogue, and they’re going to take shipments. They’re going to crosstalk them somewhere, and they’re going to take the doors off and unload half the cargo and send it on its way. So we’re seeing pill fridge is a problem now too. We also see motor carriers that book a load with the freight broker, and they have the pickup information. Then they fall off the shipment, and they send a truck still, or they contract somebody else. So I think we’re all familiar that these are happening in a lot of different ways. A lot of the actors that are doing this are from overseas, and gone are the days when to get a load stolen, it had to be parked in an unsecure lot or at a truck stop that you lose the trailer there. Now, all you need is a computer to do it, and unfortunately, the criminals recognize that as well.

Brent – 00:42:04:

Yeah, well, so thank you so much for the heads up on those things. I agree with you on the MC numbers. And thank you for the advice on ways in which they can protect their business. Use technology to be able to vet and understand who you’re doing business with. And then just use common sense. You know, if it doesn’t look right, probably isn’t. And so just make sure you protect your business because it all comes back to the cost of running your operation. And if you can’t get insured, you can’t operate. And so, Chad, man, this has been fantastic. What a great first time. You got a great story. I love your story on how you got to where you are. You continue to iterate yourself to find your pathway to success in this marketplace. Then you guys creating something unique to help the marketplace that Reliance Partners, you and Andrew, creating something there that is a better opportunity for this marketplace to have more options to be able to purchase insurance. And so what a great thing. And then thank you so much for all the advice and the one-on-ones on how to buy it, what to look out for, what are things in which that they can be more informed on how to purchase the best coverage for themselves. No matter what. So, man, it’s been great today having you on.

Chad – 00:43:06:

Hey, likewise, Brent. Thanks for having me. Always good to catch up and enjoyed our chat today.

Brent – 00:43:11:

Yeah. Well, Freight Nation, you just got a great one on insurance from one of the best experts in the marketplace, Mr. Chad. Come on, say it with me, Mr. Chad Eichelberger. There you go. All right. Chad, again, thank you so much for being on Freight Nation. Thank you for bringing your expertise and trying to help this market move forward. And that’s a wrap, Freight Nation, for this episode on insurance. They had a great story on one person’s pathway to their success inside of freight transportation. As we like to say at Freight Nation, don’t forget to work hard, to be kind, and to stay humble. Thanks a lot, Freight Nation. We’ll catch you the next time.

Outro – 00:43:43:

On behalf of the Truck Stop team, thanks for listening to this episode of Freight Nation. To find out more about the show, head to forward slash podcast. If you enjoyed this episode, make sure you hit subscribe so you don’t miss any future episodes. Until then, keep on trucking and exploring the open roads with Freight Nation, a trucking podcast.

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